Webster v. Psychiatric Medical Care, LLC

Filing 60

ORDER granting in part and denying in part 37 Motion for Sanctions and denying as moot 58 Motion to Supplement. The Court denies the specific relief requested but otherwise grants the motion for sanctions. Signed by Judge Dana L. Christensen on 5/30/2019. (ASG)

FILED
MAY 30 201
9

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
MISSOULA DIVISION

RACHELE. WEBSTER, a married
woman,

Clerk, u.s Courts
District Of Montana
Missoula Division

CV 17- 116-M-DLC

Plaintiff,
vs.

ORDER

PSYCHIATRIC MEDICAL CARE,
LLC, doing business as SENIOR LIFE
SOLUTIONS, a Tennessee limited
liability company,
Defendant.

Before the Court is Plaintiff Rachel E. Webster's Motion for Sanctions.
(Doc. 37.) A hearing was held on the motion on April 26, 2019.

The Court now

grants the motion in substantial part, but it denies the form of relief requested.
Webster is entitled to: (1) an adverse inference instruction; (2) the opportunity to
conduct additional discovery; and (3) her costs and fees associated with bringing
the motion and with correcting the prejudice she has suffered.
BACKGROUND

Webster initiated suit in this matter on August 28, 2017, alleging that she
was unlawfully terminated from her employment with Defendant Psychiatric

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Medical Care, LLC ("PMC").

On January 3, 2019, the Court granted Webster's

motion to file an amended complaint adding Defendant Cabinet Peaks Medical
Center ("Cabinet Peaks"), a medical facility located in Libby, Montana, which
contracted with PMC to provide services at Cabinet Peaks.

Trial is set for

October 15, 2019.
Webster's claims arise from the termination of her employment with PMC.
Webster began working for PMC as a Program Therapist on June 5, 2017, with an
annual salary of $65,000.

(Doc. 13 at 2.)

Along with two other new hires,

Webster traveled to Missouri for training the following week.
2017, PMC terminated Webster's employment.

(Id.)

On June 21,

(Id. at 3.)

Webster suffers from multiple sclerosis and trigeminal neuralgia, and she
alleges that her firing was related to her disability, in violation of the Americans
with Disabilities Act ("ADA").

(See Doc. 40.)

terminated due to performance issues.

PMC theorizes that Webster was

However, key evidence-Webster's

personnel file, including her training evaluation- was destroyed within days of
Webster's termination.

Further, PMC did not timely inform Webster of the

destruction of the file.
Webster requests sanctions because PMC:
(!)destroyed Webster's training records;
(2)withheld an email referencing the destruction of the records until the day
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before discovery closed;
())withheld the templates used to assess Webster's performance in training
until after the close of discovery;
(4)failed to produce other documents regarding Webster's performance,
"including an email that disproves one of PMC's claimed reasons for
terminating Ms. Webster";
(5)failed to disclose witnesses known to PMC to have discoverable
information; and
(6) failed to produce a copy of its insurance policy for ten months and failed,
until the hearing on this matter, 1 to produce an unredacted copy including
the relevant policy limits.
(Doc. 38 at 7.)
LEGAL STANDARD

"There are two sources of authority under which a district court can sanction
a party who has despoiled evidence: the inherent power of federal courts to levy
sanctions in response to abusive litigation practices, and the availability of
sanctions under Rule 37 against a party who 'fails to obey an order to provide or

1

At the hearing, counsel for PMC stated it would correct its error in failing to produce an
unredacted copy of the policy. (The copy that the Court has seen is 100% redacted, such that no
words are readable. (Doc. 38-7 at 8- 25.)) The Court asswnes that PMC has followed through
on its counsel' s representation.

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permit discovery."'

Leon v. IDX Sys. Corp., 464 F.3d 951,958 (9th Cir. 2006)

(quotingFjelstadv. Am. Honda Motor, Co., 762 F.2d 1334, 1339 (9th Cir. 1985)).

Regardless of the source of authority relied upon, the district court has broad
discretion to fashion appropriate sanctions.

Id.

Whether the court's authority derives from Rule 37 or from its inherent
authority, the court should consider five factors "[b]efore imposing the harsh
sanction of dismissal":
(1 )the public's interest in expeditious resolution oflitigation;
(2)the court's need to manage its dockets;
(3)the risk of prejudice to the party seeking sanctions;
(4)the public policy favoring disposition of cases on their merits; and
(5)the availability of less drastic sanctions.
Anheuser-Busch, Inc. v. Nat. Beverage Distribs., 69 F.3d 337,348 (9th Cir. 1995)

(quoting Henry v. Gill Indus., Inc., 983 F.2d 943, 948 (9th Cir. 1993)).
Additionally, "[a] finding of 'willfulness, fault, or bad faith' is required for
dismissal to be proper."

Leon, 464 F.3d at 958 (quoting Anheuser-Busch, 69 F.3d

at 348).
ANALYSIS

Webster's claims may be divided between two legal categories.

First, she

alleges spoliation, which is sanctionable under the Court's inherent authority. See

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Leon, 464 F.3d at 958 & n.4.

Second, she contends that PMC failed to timely

produce-or, in some instances, to produce at any time----discoverable and
responsive information and evidence, which is sanctionable under Rule 37.

I.

Spoliation
As the Northern District of California has noted, courts generally look for

three elements to determine if sanctionable spoliation has occurred: ( 1) a duty to
preserve the evidence at the time of destruction; (2) culpability for the destruction;
and (3) relevance of the destroyed evidence to a claim or defense "such that a
reasonable trier of fact could find that it would support that claim or defense."

Rockman Co. (USA) v. Nong Shim Co., 229 F. Supp. 3d 1109, 1122-23 (N.D. Cal.
2017) (quoting Apple Inc. v. Samsung Elecs. Co., 888 F. Supp. 2d 976, 989 (N.D.
Cal. 2012)).

Because Webster alleges not only spoliation but also violations

sanctionable under Rule 3 7, the Court will address the second and third elements in
its analysis of PMC's discovery-related conduct as a whole.

See infra p. 16-22.

Webster relies on 29 C.F.R. § 1602.14, promulgated in part under the ADA,
to establish the existence of a duty at the time Webster's training documents were
shredded.

Section 1602.14 provides that "[i]n the case of involuntary termination

of an employee, the personnel records of the individual terminated shall be kept for
a period of one year from the date of termination."
"The affirmative obligation imposed by [an earlier version of§ 1602.14] to

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preserve records was clearly designed to protect ... plaintiffs from an employer's
destruction of possibly damaging evidence."
1176, 1195 (4th Cir. 1981 ).

EEOC v. Am. Nat'/ Bank, 652 F.2d

As the Fourth Circuit has noted, considering a cause

of action brought under Title VII-under which § 1602.14 was also promulgatedeven where the regulation does not create an affirmative obligation to preserve
records,
[e ]mployers have been on notice since the earliest days of Title VII' s
enforcement of the critical importance of the maintenance of
employment records going back at least to the effective date of the Title.
In consequence, holding [an] employer to the normal litigation
consequences of a failure to maintain relevant employment records
imposes no higher standard than that dictated by sound business
judgment in respect of the maintenance of all business records having
potential relevance in any of the litigation patterns to which businesses
stand constantly exposed.
Id. at 1195-96.

PMC does not dispute the applicability of this regulation.

Instead, it argues

that any violation of any duty created by § 1602.14 does not necessarily translate to
sanctions.

PMC contends that the touchstone of the inquiry is foreseeability and

that litigation was not foreseeable at the time that the records were shredded.
However, accepting PMC's proposed analysis, the Court finds that PMC was not
justified in shredding Webster's file.
Regardless of the precise legal framework, PMC had a duty to retain
Webster's employment documents.

Even in the absence of§ 1602.14, PMC
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would nonetheless be required to preserve and produce evidence.

"[T]here is no

question that the duty to preserve relevant evidence may arise even before
litigation is formally commenced."

Apple Inc., 888 F. Supp. 2d at 989. PMC

had a duty to preserve the evidence if this litigation was reasonable foreseeable.

See Rockman, 229 F. Supp. 3d at 1122.

"Although the Ninth Circuit has not

precisely defined when the duty to preserve is triggered, trial courts in this Circuit
generally agree that, ' [a] s soon as a potential claim is identified, a litigant is under
a duty to preserve evidence which it knows or reasonably should know is relevant
to the action."'

Apple Inc., 888 F. Supp. 2d at 990-91 ( quoting In re Napster, Inc.

Copyright Litig. , 462 F. Supp. 2d 1060, 1067 (N.D. Cal. 2006)).
Here, litigation was foreseeable at the time of Webster's discharge.

At the

hearing on the motion, PMC argued that the circumstances of Webster's
termination did not put PMC on notice of a possible lawsuit.

Setting aside the

issue of whether PMC was aware of Webster's medical diagnoses at the time of
discharge- a factual issue likely to be significant in the resolution of this case on
its merits-a sophisticated entity like PMC should always recognize the possibility
of a lawsuit when it terminates the employment of a professional.

Further,

Webster did not delay in putting PMC on notice of her claims; she sent a litigationhold letter to PMC only five days after her termination.
documents had already been destroyed.

By that time, her training

An employee should not shoulder the

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blame for a corporate employers' unwillingness to maintain records for a
reasonable period of time after firing the employee.

PMC had a duty to preserve

Webster's employment documents, and it may fairly be held accountable for its
failure to do so.
II.

PMC's Failure to Disclose and Respond to Discovery Requests

Apart from the destruction of Webster's personnel documents, Webster
argues that PMC had a duty to supplement its initial disclosures and discovery
responses. Relevant here is PMC's conduct in: (1) failing to timely produce an
email referencing the shredding of Webster's personnel file; (2) failing to timely
produce the templates used to assess Webster's training performance; (3) failing to
produce other documents regarding Webster's job performance; (4) failing to
disclose witnesses known to PMC to have discoverable information; and (5) failing
to produce an unredacted copy of the relevant insurance policy.
A. The Perry/McGhee Email

The day after Webster was fired, Lynsey Perry, PMC's vice president of
operations, wrote an email to Justin McGhee, the regional manager overseeing
Webster's employment.

(Doc. 38-1.)

That email was produced the day before

discovery closed, and it is the only document that Webster has received discussing
the destruction of her personnel file.

McGhee had previously emailed Perry,

asking, "Does the team need to hold on to any of Rachel's orientation paperwork?

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I wasn't sure if Jan needs any of it or if they can shred it."
ultimately produced, Perry replied, "It can be shredded."

In the email that was

(Id.)

It is unclear when exactly this email should have been produced, but there

appears to be no dispute that it is responsive to Webster's discovery requests.

In

the absence of any argument regarding when the email should have been produced,
the Court cannot determine that PMC failed to fulfill its discovery obligations by
not producing the email until one day before the close of discovery, although this
conduct is problematic on its face.

Nevertheless, the Court will consider this

email in its analysis of PMC's culpability and the prejudice suffered by Webster.

See infra p. 16-22.
B. Training Templates
After discovery closed, PMC produced templates of the training documents
that were used to assess Webster's performance.

(Docs. 38-2, 38-3, 38-4.)

As

with the Perry/McGhee email discussed immediately above, Webster does not
seem to argue that the failure to timely produce is independently sanctionable.
Thus, the Court considers the untimely disclosure of the training documents in
fashioning an appropriate remedy for PMC's destruction and nondisclosure of
other evidence.

C. Other Responsive Documents
Webster contends that PMC still has not met its discovery obligations,

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arguing that additional responsive documents remain within PMC's control.

To

demonstrate her point, Webster identifies two documents she has within her
possession that should have been produced by PMC but were not.

The Court is

concerned that PMC has not fulfilled its discovery obligations, but it cannot
determine that its failure to produce documents has caused prejudice and is
sanctionable in and of itself. Thus, the Court construes Webster's motion in part
as a motion to compel.

The Court will order PMC to do what PMC should have

done from the beginning- search for and produce all documents within its control
with any potential relevance to this case.
First, Webster points to an email chain between Kimberly Bourg, Webster' s
supervisor, and Ahyoung Huff, an administrator at Cabinet Peaks, about the
possibility of providing dictation services for Webster.

(Doc. 38-16.)

Webster

ultimately received this document in response to a subpoena directed to Cabinet
Peaks.

She anticipates using the email to prove that PMC was on notice of and

failed to accommodate her disability.
Second, Webster argues that PMC wrongfully failed to produce an email
from PMC's head trainer to Webster and her fellow incoming employees. (Doc.
38-5.)

This email suggests that trainees are expected to feel overwhelmed by the

information they receive in training, arguably refuting PMC's claim that it
terminated Webster because she expressed concern about her ability to retain the

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information given in training.
Webster has received these emails from other sources, and it does not appear
that she has been prejudiced by PMC's nonproduction of these particular
documents.

However, the Court is unsure whether PMC has met its discovery

obligations.

Notably, the lead trainer testified during her deposition that she was

never asked to preserve or search for emails and other documents relating to
Webster.

(Doc. 38-13 at 3.) Plainly, Webster is entitled to all responsive and

discoverable documents, and the Court is unconvinced that she has received them
to date.

Thus, as discussed below, PMC must search for and produce all

responsive documents in its possession or over which it may exercise control
within 30 days of this order, or it will be sanctioned.2
D. Witnesses

Webster argues that PMC failed to timely disclose the names and contact
information of employees with discoverable information about Webster's
2

Although it is outside the scope of the parties' arguments on the motion for sanctions, in the
interest of avoiding further discovery motions, the Court notes that it has seen at least one
Request for Production to which these documents would be responsive. (Doc. 55-1 at 7- 8.)
Rather than producing any documents, it appears that PMC issued a laundry list of objections to
production, followed by a note that it "is not aware of responsive documents it is withholding
based on its objections, other than based on attorney client privilege/work product." (Id. at 8.)
However, the Court should not need to tell a litigant- particularly a well-represented business
entity such as PMC- that the onus of production falls on its shoulders. PMC has not attempted
to locate responsive documents, and it cannot reasonably argue that production is overly
burdensome given its complete failure to search for such documents. As a result of PMC's
failure to adhere to the rules of discovery, it has waived its right to raise applicable objections to
Webster's discovery requests.

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termination.

On the last day of discovery, PMC supplemented its initial

disclosures with the names of five employees previously undisclosed, with vague
descriptions of the information that they may possess.

PMC has never disclosed

the names of its Chief Financial Officer, Bobby Rouse, and Chief Executive
Officer, J.R. Greene, both of whom discussed Webster' s termination with Vice
President Perry.

PMC contends that it had no obligation to disclose these

witnesses earlier, or- in the case of Rouse and Greene-to disclose them at all.
Even in the absence of a discovery request, litigants must provide, within 14
days of the preliminary pretrial conference, "the name . .. of each individual likely
to have discoverable information- along with the subjects of that informationthat the disclosing party may use to support its claims or defenses, unless the use
would be solely for impeachment."

Fed. R. Civ. P. 26(a)(l)(A)(i), (C).

If the

initial disclosures later prove to be incomplete, the litigant "must supplement or
correct its disclosure .. . in a timely manner" unless "the additional or corrective
information has ... otherwise been made known to the other parties during the
discovery process or in writing."

Fed. R. Civ. P. 26(e)(l)(A); but see 2000

Committee Advisory Note to Rule 26 ("Lawyers must be careful to recognize that
informal disclosure during the discovery process will rarely satisfy Rule
26(a)(1 ).").
Rule 26(a)(l) extends only to evidence "that the party may use to support its

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claims or defenses."

2000 Committee Advisory Note to Rule 26. 3 It "relieve[s]

parties of the duty to disclose the names of all persons with relevant and
discoverable information or all relevant documents, including harmful witnesses or
'smoking gun' documents that the party does not intend to use."

Id.

Generally,

the fix for a litigant's failure to comply with Rule 26(a) is exclusion; where a party
fails to meet its obligations under Rule 26(a), "the party is not allowed to use that
information or witness to supply evidence on a motion, at a hearing, or at a trial,
unless the failure was substantially justified or is harmless."

Fed. R. Civ. P.

37(c)(l).
PMC has the better argument regarding the scope of 26(a)( 1) initial
disclosures.

It was not obligated to disclose every witness with discoverable

information pursuant to Rule 26(a)(l)(A)(i), and it is unclear whether PMC
determined it may use the witnesses prior to the date of its supplemental
disclosure.

Although the summaries of information known to each witness were

less than complete, this problem can and should be easily remedied.

The Court

will order PMC to supplement its disclosures with a fuller description of the

3

PMC filed a motion to supplement its response to the motion for sanctions, stating that it
"inadvertently did not cite to the 2000 Committee Advisory Notes," which provide that a witness
must be disclosed only if the disclosing party intends to use that witness. (Doc. 58.) The Court
denies that motion as moot; further, it does not see an initial failure to cite beneficial law as good
cause for amendment. However, because the Court is obligated to apply the correct legal
standard, it will consider the Advisory Noes.

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"subjects of ... information" known to the witnesses previously disclosed.

Fed.

R. Civ. P. 26(a)(l)(A)(i).
The larger problem with PMC's supplemental disclosures is their lack of
timeliness.

By failing to supplement prior to the day before discovery closed,

PMC effectively barred Webster from developing the facts regarding these
potential witnesses. Further, given PMC's other discovery violations and its
general pattern of untimely responses, Webster struggled- and, in some instances,
was unable-to receive the information she needed from other sources.

PMC's

broader pattern of non-disclosure renders its failure to timely supplement its Rule
26 initial disclosure far more damaging than it likely would have otherwise been.
Because the witnesses may ultimately aid Webster as much or more than
PMC and because their exclusion would not assist in finding a fair and accurate
resolution of this case on the merits, the Court finds that exclusion under Rule
37(c)(l) is not an appropriate remedy under the circumstances.

Rather, as

outlined below following the analysis of culpability and prejudice, the Court will
grant to Webster the opportunity to cure any prejudice caused by PMC's failure to
meet its discovery obligations in a timely manner.
E. Insurance Policy

Finally, Webster argues that PMC failed to produce its insurance policy.
Within 14 days of the preliminary pretrial conference, a litigant must produce "for
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inspection and copying . .. , any insurance agreement under which an insurance
business may be liable to satisfy all or part of a possible judgment in the action or
to indemnify or reimburse for proceedings made to satisfy the judgment." Fed. R.
Civ. P. 26(a)(l)(A)(iv).

It is uncontroverted that-despite the clarity of Rule

26(a)(l)(A)(iv)-PMC failed to disclose the existence of its policy in a timely
fashion and to disclose the liability limits in any manner prior to the hearing on the
motion to suppress. See supra p. 11 n.2.
its discovery obligations as to this issue.

PMC unquestionably failed to fulfill
The Court finds that the award of fees

and costs to Webster appropriately remedies this failure.

ID.

Remedy

"Before imposing the 'harsh sanction' of dismissal, ... the district court
should consider the following factors: ' (1) the public's interest in expeditious
resolution of litigation; (2) the court's need to manage its dockets; (3) the risk of
prejudice to the party seeking sanctions; (4) the public policy favoring disposition
of cases on their merits; and (5) the availability of less drastic sanctions."'
464 F.3d at 958 (quoting Anheuser-Busch, 69 F.3d at 348)).

Leon,

Further, "a finding

of 'willfulness, fault, or bad faith' is required for dismissal to be proper."' Id.
(quoting Anheuser-Busch, 69 F .3d at 348). Because culpability is a threshold
consideration, the Court begins with addressing PMC's intent in destroying and
failing to produce evidence.

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A. Culpability

The degree to which PMC acted in bad faith is relevant to determining the
appropriate remedy, whether sanctions are imposed under the Court's inherent
authority or under Rule 3 7. Leon, 464 F .3 d at 95 8. Here, the Court stops just
short of finding that PMC generally acted in bad faith.

Certainly, PMC is not

innocent; all litigants must produce discoverable information freely, and PMC is a
sophisticated business entity that can and likely does understand its discovery
obligations.

Thus, it is fair to hold PMC accountable for its discovery conduct,

but it would be a step too far, under the circumstances, to issue a sanction in the
form of a default judgment in favor of Webster.
In regard to spoliation, which is the most serious issue raised in Webster's
motion, the Court finds that PMC did not destroy Webster's file with the level of
culpability necessary to warrant the "harsh sanction" of default judgment.

Anheuser-Busch, 69 F.3d at 348.

Given PMC's broad pattern of nondisclosure, it

appears that PMC has not discharged its basic discovery obligations with the
diligence and fairness expected by the Court and required by the Federal Rules of
Civil Procedure. That said, after examining the evidence and conducting a
hearing on the motion, the Court finds that Webster's file was shredded primarily
out of carelessness rather than bad faith.
"A party's destruction of evidence qualifies as willful spoliation if the party
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has 'some notice that the documents were potentially relevant to the litigation
before they were destroyed."'

Leon, 464 F .3d at 959 ( quoting United States v.

Kitsap Physicians Serv., 314 F.3d 995, 1001 (9th Cir. 2002)). As discussed

above, PMC should have anticipated litigation when it terminated Webster's
employment, and it had a legal duty to preserve her training documents.

See

supra p. 5- 8. But the Court does not find that PMC recognized that legal duty

and shredded the documents to avoid the consequences of those documents.
Litigation had not been commenced, and Webster was terminated mere weeks after
she started work, while she was still in training.

PMC acted unreasonably and

imprudently, but it did not act in bad faith.
The Court finds, too, that PMC's general pattern of nonresponsiveness
throughout the discovery period primarily arose from its failure to give this case
the attention it deserved.

Because PMC ignored or underestimated the merits of

Webster's case, it failed to timely recognize and disclose witnesses and documents
relevant to this litigation. This does not render PMC' s conduct excusable, but it
does not rise to the level of bad faith.
In one regard, however, the Court finds that PMC acted willfully and
dishonestly.

Webster' s First Request for Production was for "a complete copy of

all files maintained by PMC regarding [Webster] before, during, and after her
employment at PMC."

(Doc. 55-1 at 5.) PMC responded that it was "not aware
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of responsive documents it is withholding based on its objections, other than based
on attorney client privilege/work product."

(Doc. 55-1 at 6.)

As discussed at the

hearing on the motion, PMC was, in fact, aware that responsive documents had
existed and were being withheld because they had been destroyed. PMC was
willfully dishonest and appears to have been attempting to cover up its spoliation.
PMC's behavior is not acceptable; indeed, in at least one regard, it arguably
constitutes bad faith.

However, as discussed below, the Court can fashion an

appropriate remedy short of the extreme sanction of default judgment.
B. Prejudice

Webster argues that she has been irreversibly prejudiced by PMC's conduct
throughout the discovery process such that a default judgment in her favor is the
only appropriate sanction.

The Court agrees that Webster has suffered prejudice,

but it disagrees that judgment in her favor is necessary.
Regarding the destroyed training documents, PMC contends that Webster
has not suffered prejudice because PMC never claimed to have fired her because of
lack of competence or inability to successfully complete training.

(Doc. 46 at 5.)

Rather, PMC posits that Webster's termination was due to her failure to obtain the
requisite state license and a vague sense that "PMC's environment may not be the
best match for [Webster' s] skills and work style."
position is overly simplistic, if not disingenuous.
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(Doc. 46 at 6.)

PMC's

Certainly, documents showing

that Webster performed well at training would tend to disprove that PMC
terminated Webster for a legitimate reason.

Given that Webster is attempting to

show that she was fired because of a protected disability, her ability to do the tasks
assigned to her is powerful evidence in her favor.
"[B]ecause 'the relevance of destroyed documents cannot be clearly
ascertained [when] the documents no longer exist,' a party 'can hardly assert any
presumption of irrelevance as to the destroyed documents."'

Leon, 464 F.3d at

959 (quoting Alexander v. Nat'/ Farmers Org., 687 F.2d 1173, 1205 (8th Cir.
1982) (alterations omitted)).

Webster did not know of either the training

documents or their destruction prior to taking depositions, and accordingly she did
not have the opportunity to explore the significance of the evidence to the case.
PMC cannot, particularly after engaging in an obstructionist pattern of discovery,
ask Webster to simply trust in its interpretation of evidence when Webster has not
been freely able to develop her own theories.

Webster has suffered prejudice,

both by the destruction of the evidence (which by all accounts favors her legal
theories) and by the nondisclosure of the evidence.

However, as discussed below,

it is not too late to remedy that prejudice and to reach a decision on the merits.
Similarly, Webster has been prejudiced by PMC's refusal to search for and
share information throughout the discovery process.

This failure translated to an

inability to seek other discoverable information, both through discovery requests
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and depositions.

Simply put, Webster does not know as much as PMC knows

regarding her termination, and the imbalance of knowledge can only be attributed
to PMC.

Again, though, the Court finds that time and money are sufficient

remedies.
C. Equitable and Policy Interests

Prior to ordering the sanction of a default judgment, the Court is also
instructed to consider "the public's interest in expeditious resolution of litigation";
"the court's need to manage its dockets"; and "the public policy favoring
disposition of cases on their merits." Leon, 464 F.3d at 958. To avoid
redundancy, the Court does not analyze these factors-all of which counsel against
a default judgment-individually. Essentially, each consideration asks the Court
to balance efficiency against resolution on the merits.
The Court previously granted Webster's motion to amend her complaint to
bring in an additional defendant.

Trial has been reset for October 2019, giving

the parties a substantial amount of time to conduct further discovery.

The Court

can give Webster the ability to correct the prejudice she has suffered without
further continuing trial and its associated deadlines.

Further, the Court is

unconvinced that Webster will not be able to receive all of the discovery- aside
from the destroyed training documents- to which she is entitled.

And the jury

will receive an adverse inference instruction directed to the spoliated documents.
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With lesser remedies in place, the Court finds that a jury will be able to reach a fair
determination of this case on its merits.
D. Availability of Lesser Sanctions
The Court considers the appropriate sanction pursuant to both its inherent
authority and Rule 37.

There is no absolute limit to the sanctions available to the

court, but Rule 37 sets forth a non-exhaustive list of potential remedies, including:
excluding evidence, issuing an adverse inference instruction, instructing the jury of
a party's misconduct, preventing a party from presenting a particular claim or
defense, awarding partial dismissal, entering default judgment, and awarding
reasonable fees.

Fed. R. Civ. P. 37(b)(2)(A)(i)-(vi), (c)(l).

Here, a resolution on the merits remains possible.

And, although

misconduct has occurred, the need to punish PMC is not so great that default
judgment is warranted.

The Court will order sanctions directed to placing

Webster in the position she would have been in if no evidence had been destroyed
and all discoverable evidence had been timely produced.
Of course, because the Court and Webster have not seen the training
documents, it is unclear precisely what position Webster would be in had those
documents been preserved and produced.

Though imperfect, the Court finds that

the best remedy is to issue an adverse inference instruction to the jury, authorizing
the jury to infer that the destroyed documents showed that Webster's performance
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had been satisfactory prior to her termination.

Webster also may use the

destruction of the documents as evidence suggesting her termination was
pretextual.

Further, Webster will be able to depose previously deposed witnesses

to address the limited issues raised by the destruction of the templates, with PMC
paying Webster's reasonable expenses.
Additionally, the Court will order PMC to do what it should have done when
it first received Webster's discovery requests-search for and produce all
responsive documents.

PMC will have 30 days to complete this task.

PMC

bears the burden of finding all relevant documents, and, because PMC has failed to
properly engage in the discovery process, the Court is unconcerned about the time
pressure PMC will face and any expense PMC will incur in meeting its discovery
obligations. PMC must also, within 14 days of this Order, adequately supplement
its initial disclosures.

PMC's failure to comply with this Order will result in

further sanctions, which may include default judgment.
Although the Court rejects Webster's proposed form of sanction, because
Webster was justified in seeking relief, the Court will further order PMC to pay
Webster's reasonable attorneys' fees and costs incurred in filing her motion for
sanctions.
Accordingly, IT IS ORDERED that the motion (Doc. 37) is GRANTED in
part and DENIED in part.

The Court denies the specific relief requested but

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otherwise grants the motion.
IT IS FURTHER ORDERED that:
(1) The jury will be given an adverse inference instruction at trial;

(2)Webster shall submit a statement of reasonable attorneys' fees and costs
incurred in making her motion for sanctions (Doc. 37) within 7 days of
this Order, and PMC will pay those expenses within 7 days of the
submission of Webster's statement;
(3)PMC shall pay the reasonable attorneys' fees and costs incurred by
Webster in redeposing those witnesses with knowledge of either
Webster's performance during training or knowledge of Webster's
training file and its destruction, and Webster shall have 60 days to
conduct those depositions;
(4)PMC shall search for and produce, within thirty days of this Order, all
documents in its possession or over which it may exercise control
referring to Webster, whether related directly to Webster's training
experience or not, except for those documents that are protected as
privileged or attorney work product and which are specifically identified
on a privilege log;
(S)PMC shall supplement its initial disclosures with a full description of
what each witness may testify to, and Webster shall have 60 days to

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depose these witnesses, with Webster to bear her own attorneys' fees and
costs; and
(6)PMC's Motion for Leave to Supplement Our Response to Plaintiffs
Motion for Sanctions (Doc. 58) is DENIED as moot.
DATED this 30¾ ay ofMay, 2019.

'
Dana L. Christensen, Chief Judge
United States District Court

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